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March 25, 2012

Stocata FOREX Update EUR/USD: March 24, 2012.

Last week I wrote: "It seems to me that as long as the S&P500 future keeps moving up there will be pressure for a move up of the EUR.USD. There is a hidden divergence between price and the indicators. We should expect higher Euro prices next week".

Yes, we got higher prices the past week. Looking at the daily chart and technical analysis, everything points in the direction of a further move up next week. Still I am not convinced. We are at some resistance levels and I am expecting the S&P500 index to move down which will influence the EUR.USD. So, I think there will be lower prices next week, but like I said I am not very convinced of that neither. Hopefully it will become more clear next week.

It looks like we are making the longer term wave [B] up. But! We still have to consider the possibility that the top in May 2011 was already the top of wave [B] and that we started the long term wave [C] down since then. If that is the case there will only be limited up correction moves during the long term down move. A target for the up move to complete a higher wave [B] would be the 200 day average around 1.37. SATS5 is black for an open short position.

HOURLY CHART:

Weekly Chart: we are closing the week higher, but this is probably nothing more than an up reaction to the lower prices of the previous 3 weeks. There are more signs for lower Euro prices. We did not yet reach the median line of the down moving pitchfork. Price turned down against the 100 week average. Indicators are turning down with a hidden divergence (lower indicator tops with higher price tops). This is a setup to push price below the last low. This could mean that we had already the long term top of wave [B] and that we are in a long term downtrend for wave [C] down. The long term weekly SATS5 is black.

Monthly Chart: March 3, 2012: The Euro made a long term top Elliott wave [5] around $1.60 July 2008. A correction wave {A} was started, retracing almost 50% of the complete up move. Next the correction wave {B} retraced a big part of the {A} wave, before starting the {C} and with that completing wave [A] down. This [A] wave bounced up from the 50% retracement level and the 200-month moving average. The question is if the lowest level has been reached at that point. After an up correction wave [B], we will have the [C] wave down. Question is did we already finish the [B] wave up or not? The support of the 100 Month average is broken and we fell out of a previous up moving pitchfork. The evolution of the chart shows the intention of making an upturn. But the resistance of the 100 month average may be too strong and force the Euro down again. Best guess for now is a lower Euro in March. The long term SATS5 expert is red for a long term open short position (Chart is updated until 03/23/2012).